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Global Dairy Groups Angry Over Canada's Proposed Rules on Imports

13 September 2016

GLOBAL - Dairy organisations in the US, Australia, the EU, Mexico and New Zealand today issued a joint letter to their respective trade and agriculture officials, expressing indignation about Canada’s recent actions to encourage the use of domestic over imported dairy ingredients.

Canada's supply management addresses unstable markets for dairy products by controlling domestic production and imports to ensure supply does not exceed demand.

The groups said Canada’s increasingly protectionist policies violate “international trade obligations, hold out the prospect of trade diversion with attendant global price-depressing impacts and are in conflict with the principles of free markets and fair and transparent trade.”

The US groups, including the National Milk Producers Federation, the US Dairy Export Council and the International Dairy Foods Association, oppose a Canadian Agreement in Principle recently concluded between Canada’s dairy producers and processors.

The agreement, which is undergoing finalisation and review in Canada, would provide an incentive to substitute Canadian dairy ingredients for imported dairy ingredients. If ratified, the agreement would take effect November 1, 2016.

In addition to the three US organisations, the other dairy groups are the Australian Dairy Industry Council, the European Dairy Association, the European Whey Products Association, the European Association of Dairy Trade, Mexico National Chamber of Industrial Milk and the Dairy Companies Association of New Zealand. Each of the dairy organisations asked officials in their respective countries to initiate a World Trade Organisation dispute settlement proceeding to challenge the agreement once its details are announced.

“The dairy trade situation with Canada has gone from bad to worse this year and now Canada is contemplating doubling down on that terrible track record,” said Jim Mulhern, president and CEO of the National Milk Producers Federation. “Enough is enough; Canada needs to stop shirking its dairy commitments and hold up its end of already negotiated agreements.”